by Soo Jin Oh
SVP, Data Business and Ad Operations, Magnetic
Featured on Marketing Land’s Mobile Marketing Column, September 11, 2014
The Siren, the emblem of Starbucks, is not only an iconic symbol — she depicts the obsession that the coffee king has cultivated in all of us worldwide.
“She is a storyteller, carrying the lore of Starbucks ahead, and remembering our past. In a lot of ways, she’s a muse –always there, inspiring us and pushing us ahead,” a senior writer identified only as Steve M. posted on Starbucks’ corporate blog in 2011. “And she’s a promise too, inviting all of us to find what we’re looking for, even if it’s something we haven’t even imagined yet.”
As expected of a dangerous yet alluring creature, we’ve succumbed willingly and almost unconsciously to the daily habit of paying $5 for a cup of joe that was once less than a buck.
Starbucks Chairman, President and Chief Executive Officer Howard Schultz said at the company’s 2012 Investor Conference that “Starbucks will have more than 20,000 retail stores on six continents by 2014 and more than 200,000 points of global CPG distribution by 2015.”
Today, Starbucks rules the world of coffee and it’s on its way to reigning over the mobile kingdom as well. (Disclosure: Starbucks is not a current client and has never been a direct client of my employer, Magnetic, though the company did run a campaign for Starbucks through an agency in the past.)
Whipping Up More Than A Frappuccino
Static bland 320×50 ad units that people accidentally tap or don’t notice at all aren’t acceptable for Starbucks. Instead, the coffee company does it up with its mobile ads using Mobile Rich Media Interface Definitions (MRAID).
These ad units not only expand to fill full mobile screens, but they incorporate the unique mobile features of swipe, tap, and shake for users to engage with their brand and then share within their social sphere.
Marketers need to build on the same level of sophistication in their own mobile creative and take full advantage of the full screen and user engagement capabilities, which MRAID allows them to do.
Here’s a mock-up of an expandable ad designed to be displayed on an iPhone, so you can get a taste of the interactivity. (Editor’s note: Please excuse the clunkiness, but you can interact with this mock-up. Also, be aware that clicking on the call to action should launch a video with audio.)
In addition to full screen mobile ads, Starbucks has boosted engagement over the last year through SMS messaging campaigns. In return, the consumer receives images featuring animals holding a Frappuccino of their own.
It is important for marketers to look beyond standard mobile ad units and take advantage of the ways in which mobile platforms make it exciting for consumers to opt-in to brand marketing programs.
The Starbucks App Enchants & Engages
Hopefully all marketers have learned by now that spending marketing dollars with the single goal of increasing app downloads is costly and ineffective.
Engagement with apps is key and also a bigger challenge. Starbucks clearly is winning here by incorporating the following features.
Mobile Payments & Transactions: Starbucks recently launched its newly enhanced payment app for iPhone where customers just need to shake their phones for the payment barcode to display. It also launched the digital tipping option where customers can tip their barista through their phones.
All of these innovations in mobile payments seem to be working; the company droveover $1 billion in mobile payment revenue in 2013, according to estimates from Business Insider’s research service, BI Intelligence.
In Asia, the largest mobile market with a significant number of mobile transactions, consumers bump phones at subway stations as a way to pay for their fare. Within China alone, nearly $1.6 Trillion was spent across mobile in 2013, according a The Next Web report citing statistics from the country’s central bank. Although the United States is a bit behind, BI Intelligence last year estimated that mobile credit and debit card transactions had grown 118% on average each year over the previous five years.
Rewards & Loyalty Program: How do you incentivize your users to give personal information such as a credit card number to use your app? Loyalty programs play a critical role in retailers’ success. The Starbucks app captures all of your purchases, gives you points and advances you to tiers where you can get promotions and offers, which ultimately attracts you back to your nearest Starbucks location.
By enmeshing the loyalty program with transactions, Starbucks looks beyond point of sale and towards customer experience. In May of last year, the company furtherexpanded its program to include purchases made outside its stores, a move largely unprecedented in the retail world.
It Incorporates The Latest To Be The Greatest
Instead of following trends, Starbucks creates them. The company implements the latest technology, such as QR codes, coupon downloads and virtual gift cards to elevate itself as an industry leader, all while capitalizing on the traditional technology of the store locators and click-to-call features in its app. With all of these digital components, many are starting to think of Starbucks as a technology company rather than just a coffee spot.
Starbucks itself certainly acknowledges the important role mobile plays. In a letter to shareholders (PDF) regarding fiscal 2013, Schultz said:
“The relationship that we have with our customers has always been core to our brand. Today, these connections are more powerful than ever because of the combined, complementary influence of our global retail footprint, our world-class digital and mobile technologies, and our innovative loyalty programs.”
It’s no surprise that Starbucks was named Mobile Marketer of the Year twice in the past three years and that its payment volume has seen a 73% increase year-over-year, according to Business Insider. The beverage giant always uses mobile strategies to promote new product launches, services and holiday deals in order to drive product awareness and in-store traffic.
Mobile is a front-running strategy for Starbucks, not an add-on. It is truly innovative in the mobile space, and all of these digital developments have improved upon the already-positive customer experience it provides. Starbucks is definitely a brand to watch in this space, and other brands should look to it as a model for taking their own mobile advertising to new heights.